Legal Alert

Ginnie Mae Announces Expanded Pass-through Assistance due to COVID-19 with an Initial April 13 Application Deadline

April 13, 2020
In All Participants Memorandum 20-03, dated April 10, 2020, Ginnie Mae announced revised and expanded issuer assistance with respect to the requirement to advance principal and interest payments due holders of mortgage-backed securities in view of the COVID-19 national emergency. Ginnie Mae also issued two related agreements, a Request and Repayment Agreement and a Master Supervisory Agreement. The initial deadline to request assistance is April 13, 11:59 PM ET.

The assistance will be provided under the Pass-Through Assistance Program (PTAP). Ginnie Mae advises that assistance rendered under PTAP in connection with the COVID-19 national emergency (PTAP/C19) is to be considered an extraordinary measure, for use when other resources have been exhausted and with the requirement of full repayment by the issuer.

The amount of assistance advanced by Ginnie Mae will bear a fixed rate of interest that will apply to a given month’s pass-through assistance to all issuers. The applicable interest rate will be posted on Ginnie Mae’s website on the second business day of each month. Ginnie Mae advises that a request for assistance, and the actual provision of assistance, under this program will not, in and of itself, constitute a basis for default under the Ginnie Mae Guaranty Agreement. However, any breach of the Master Supervisory Agreement or related Request and Repayment Agreements will constitute an event of default under the Master Supervisory Agreement and related Request and Repayment Agreements, the MBS Guide and the Guaranty Agreement.

Requests for assistance under PTAP/C19 may be made once per month and must relate to the principal and interest remittance due security holders for that month. PTAP/C19 funds may be used only to cover shortfalls in the principal and interest owed to security holders associated with loans that are delinquent, which includes loans in forbearance, as of the date that each request for assistance is submitted. Funds may not be used to cover other issuer operational or servicing costs.

For April 2020 remittances, the deadline to request PTAP/C-19 assistance is April 13, 2020, 11:59 PM ET.

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